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General Motors developing Internet-ready cars

A major problem faced by several international car makers is that the infotainment systems fitted are often found to be quite difficult to use, as per several owner feedbacks. General Motors Chairman and Chief Executive Officer (CEO) Dan Akerson wants to change this by updating infotainment and navigation systems and making them user friendly for the 2015 line-up of internet-ready vehicles. If the strategy to target young tech-savvy buyers works well, the company could be looking at higher profit margins in the near future.

At General Motors, it has been announced that Internet capable vehicles in mid-2014 will allow rear passengers to watch streaming videos. While discussing quarterly results of the company during a conference call, Atkerson said, “I have grandchildren that have only grown up in a world with smartphones.”

The new strategy will also allow companies such as General Motors to sell advertising within a car. It can create captive audiences by selling in-car products to Americans who spend an average of just over four hours commuting to workplaces. To illustrate options in front of General Motors, Atkerson used the example of Allstate Corp and asked, “For example, what happens if when the logo shows on your screen, it says 'brought to you by Allstate?' How many times is that going to pop? And how much can you get from Allstate?” As per initial estimates, the company can make 20 dollars from every customer who signs up for the internet service. In addition, General Motors is also in the process of enhancing its in-vehicle OnStar service, which can connect drivers to live operators for directions or for general help.

Though some analysts believe that General Motors could risk alienating customers from their vehicles by providing ad services, many would find it extremely convenient as access to real time navigation and traffic information will be available on the move. Over the years, it has emerged that developing technology has been an important way for this company and other auto manufacturers such as Ford for attracting buyers. It is hoped that the same trend would also continue in the future with better cars.

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